Switzerland’s biggest bank, UBS, has agreed to buy Credit Suisse for 3 billion Swiss francs (€3.02 billion), 60% less than the bank was worth when markets closed on Friday.
The government backed deal allows for the Swiss central bank to offer liquidity assistance of up to 100 billion Swiss francs (€103 billion).
Credit Suisse shareholders were deprived of a vote on the deal and will receive one share in UBS for every 22.48 shares they own
Frantic negotiations took place over the weekend to broker a rescue package ahead of the the markets opening on Monday morning.
Speaking this evening in the Swiss capital Bern following the announcement, UBS chairman Colm Kelleher said Credit Suisse was a “very fine asset we are determined to keep”.
“This acquisition is attractive for UBS shareholders but, let us be clear, as far as Credit Suisse is concerned, this is an emergency rescue,” he added.
Switzerland’s finance minister, Karin Keller-Sutter said the bankruptcy of a globally important bank would have created irreparable consequences for financial markets.
Responding to the news, Christine Lagarde, President of the European Central Bank said: “I welcome the swift action and the decisions taken by the Swiss authorities.” She said the move will be “instrumental for restoring orderly market conditions and ensuring financial stability.”